Measuring The True Value Of Data-Commerce Investment
Hoteliers are now looking to emerging innovative technologies to fuel short-term growth. In turn, the commerce investment conversation is shifting from “what will we gain if we do” to “what will we lose if we don’t?”
By: Chris Kronenthal, President & CTO of FreedomPay
If COVID taught hotel CTOs one thing, it was that businesses that had already begun the journey towards digital integration and contactless payment platforms were best able to respond to widescale disruption and accelerated change.
Those that were unable to pivot fast to new working practices and customer behaviors – whether it be with ‘phygital’’ hybrid services and ‘touchless’ transaction, check in and booking – found themselves falling behind in the face of social distancing, travel restrictions and dwindling occupancies.
Hotel owners are now recognizing the importance of payment tech and data strategy
Almost overnight attitudes to tech-investment, especially around payments and data commerce, changed. Prior to COVID, hotels measured value bookings, sales revenue and/or profit. In addition, ROI was measured in the long-term, especially if it involved infrastructure or hardware across physical estates. For example, returns on POS systems were often calculated over five to 10 years.
Today, everything has flipped. Value is no longer just about revenue growth, it’s about commercial sustainability, customer-retention and satisfaction, and short-term gain. This is particularly true when it comes to data commerce. Without a cohesive strategy that embraces mobile apps, digital channels and contactless payments, CTOs will find it hard to keep their facilities relevant and support the changing needs of hotels and their guests.
So, what are the ‘value’ drivers that are important to hotels in 2021?
To ascertain whether their data commerce investment delivers real value, CTOs need to ask the following questions:
- Will it fast-track data-driven innovation – front and back?
Leaders are hungry for richer, real-time data to help them identify trends and anticipate needs, whether determining customer behavior to optimize loyalty, offers and customer preferences or boosting efficiency through real-time analysis and stock control. They need commerce technology that allows them to accelerate data-led projects that deliver both customer-facing and back-office benefits.
- Does it help us build more targeted experiences and support acquisition downstream?
COVID highlighted the fact that many hotels were not fully able to exploit their digital platforms (information points, websites, social and apps) to the full. Not only were they unable to join up services, but they also weren’t able to use data to unify communications across channels and offer seamless, personalized experiences including loyalty and rewards to incentivize customers. This will have to change if hotels are to bounce back quickly from pandemic disruption. CTOs will need innovative tools to aid guest acquisition as well as to re-connect with previously loyal customers.
- Will it improve data capture and sharing?
Transaction based data has helped hotels to analyze changes in spending and booking behavior. But there is still much work to be done, even in the largest of organizations with the biggest of tech budgets. Hotels now recognize that business priorities must change to re-engage with customers and their rapidly evolving needs. Connecting data across their operations is key, there is renewed focus on removing service and business silos, making transactional, stock and customer data easier to share, increasing its value and delivering a competitive edge.
- Will it keep customer touch-points future-ready?
Some hotels used the break in demand to streamline their processes and build out tech that will support their recovery – including contactless, QR codes and mobile payments and acceptance. These changes will allow hotels to capture even more data at the sales point, feeding it back into the business and using it to enrich CRM and loyalty applications.
- Does the technology vendor have what it takes to help re-energize growth?
In 2021, hotel CTOs renewed their focus on digitalization, mobilization and greater unification and sharing. They will need support of tech-providers who can go beyond plumbing and box shifting by supporting new ‘as a service’ models, flexible relationships and wider ecosystems. Vendors who can help hotel CTOs secure business ‘buy-in’ by providing more tangible ‘customer-experience’ improvements, more compelling business use cases, and deeper richer consultative services (including compliance) will help them secure data commerce investment and unlock its true value.
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